Commentary on Economics, Information and Human Action

Not your grandfather’s dysfunctional energy policy

In the Christian Science Monitor, Robert Rapier wishes for a stable energy policy. It is an attractive idea. After all, policy uncertainty plays havoc with the ability of investors, managers, workers and consumers to coordinate plans in ways that usually work to make us all better off. He provides three examples–the production tax credit for renewable energy, Bernie Sanders’s “End Polluter Welfare Act,” and Congressional interference with Navy biofuel purchases–and as many more examples as you want could be found.

Rapier ends with a common diagnosis of the problem: “the real reason we have dysfunctional energy policies is that we elect dysfunctional leaders,” and concludes we just need to find ways to work around them.

I disagree that the reason we have dysfunctional policies is because of dysfunctional leaders. Instead we have quite talented and adept leaders, entirely capable of working the system to their advantage. We don’t have stable policy because policymakers don’t want stable policy; stability would reduce policymakers’ significance to that of mere policy-caretakers, and no one shows much reverence for caretakers (nor donates to the caretakers’ Super-PACs).

But mostly our energy policy makers have figured out–in true “stationary bandit” form–that we want to let prices and markets work for energy resources, and so they tinker around the edges. Just compare today’s energy policy practice to that of the 1950s, 1960s, and 1970s.

This isn’t a policy that Washington, D.C., has adopted so much as a policy that reality has pushed upon them. Nor is this policy something Washington, D.C. really understands. So while most of the time the tinkering is around the edges, sometimes they accidentally strike close to the foundation. When they do, that’s when we need to sit up and take notice.

AFTERTHOUGHT: At least Rapier doesn’t conclude the answer is to elect better leaders. The better fix is to change the game, not merely change the players.

SECOND AFTERTHOUGHT: Except, of course, the players are the ones who decide on the rules of the game. D’oh!

3 thoughts on “Not your grandfather’s dysfunctional energy policy”

I see the oscillations as a tug of war between wishful thinking (green, solar, wind, whatnot) and reality. The “green” ones “know” (they have a serious knowledge problem!) that green energy “is affordable if you invest enough in it”. Reality bites them at every turn, but it takes a few years. Then a new scheme is attempted, or sufficient time has passed so that an old scheme can be passed off for a new one, either because the promoters of the policy have forgotten/consist of fresh young people, or because the same delusions afflict the general public.

A sensible energy policy is kind of boring. Possibly put some taxes on energy, known beforehand and stable for decades, and then “do nothing”, let the market get on with it. This would mean coal, gas, nuclear and almost nothing else apart from hydroelectric.

— Our leaders act in the belief that the public is stupid or misguided. Why not steal?
— The public is stupid except for a minority which can be ignored.
— Average intelligence is not going to change.
— Support for intelligent policy can only come through cultural guidance and education.
— Education and culture is in the hands of Marxists, Collectivists, and Progressives.
— Well, that’s it.

I like Robert Rapier, he is a knowledgeable and honest guy. But, he is not a heavyweight political analyst. Ideas floated by Bernie Sanders (the only self-designated socialist in congress) and Keith Ellison (the only Muslim in Congress) can be summarily disregarded, as they are the lightest of all congressional lightweights.

The real issue is how Congress and the president can get away with the junk they get away with. The subsidies for useless gimmicks like windmills and solar panels, the fascination with regulating light bulbs and automobile mileages (all to no effect), the utter idiocy of thinking we can have an industrial civilization without fossil fuels. Politicians float them and our clueless and partisan media does not say whoa, wait a minute. “We have been chasing that shiny object like a kitten playing with a catnip toy to no avail”. No, our professionally trained journalists take them seriously and go out and get supporting quotations from communist front organizations like the “Union” of “Concerned” “Scientists” (hint each of those words is a world of lying) and the “physicist” (like I am a ballet dancer) Amory Lovins.